The Pakistani rupee has been doing well in the past week, with a 1.4% improvement against the US dollar. It is on track to be the best-performing currency for the month.
By Thursday, the dollar stood at Rs287.74, a decrease of 1.4% from the previous week. This has been a consistent trend throughout the week.
The rupee had hit a record low against the dollar on September 5, but since then it has recovered due to actions taken by the financial regulator and security agencies to curb black market activities.
The crackdown on black market operators has resulted in tens of millions of dollars flowing back into Pakistan’s markets.
So far, the local currency has gained around 6.1%.
The government’s actions against unlawful foreign exchange dealers and hoarders have stabilized the exchange rate and helped ease inflation and commodity prices, according to the finance ministry.
Before the crackdown, the dollar was trading at Rs332 in the open market. Now, it has depreciated to Rs288.5.
Experts believe that in order to sustain this positive trend, Pakistan needs to attract foreign direct investment into export-oriented sectors.
While the rupee has performed well recently, it has been one of the worst-performing currencies in recent years. Experts are optimistic about its future, but believe that consistent inflow and strengthening economic fundamentals are necessary.
The fate of the currency in the medium term will depend on factors such as foreign exchange reserves and the outcome of the IMF loan review in November.
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